Manufacturers and distributors often choose the wrong partners and only realize it after facing the negative business impacts of a slow failure. This can lead to brand damage as well as lost time, money, competitive ground and missed market opportunities. While it also presents a chance for a fresh start, there are ways to altogether avoid choosing the wrong partner. In this article, we outline myCaribou’s top tips for ensuring you choose the right partner the first time.
Don’t Jump the Gun
The start of a new partnership is an exciting business opportunity. Unfortunately, it’s easy to get caught up in that excitement and forget to perform proper due diligence in fully vetting a potential partner. Your first lead or a promising opportunity isn’t worth pursuing if your partnership is doomed from the beginning.
Manufacturers should consider the following when evaluating a distribution partner:
- Geographic coverage – regional, national, multi-country
- Logistics support and service capabilities
- Regulatory/government requirements
- Understand the distributor’s sales model, including resources and relationships available
Distributors should consider the following when deciding whether to represent a product:
- Regulatory approvals and certifications held
- Scalable manufacturing capabilities
- Trademarks or product ownership
- Proof of product quality and efficacy
- Understanding of all current distribution channels
Remember the 3 Aspects of Fit
In the most successful partnerships, we’ve consistently found alignment in three particular aspects: company fit, product alignment, and call point synergies.
- Company Fit: consider your potential partner’s company size, focus, geographic presence, manufacturing or distribution capabilities, certifications, etc.
- Product Alignment: is your potential partner’s offering complementary to your existing portfolio?
- Call Point Synergies: does your potential partner have relationships with the right buying audience and other key stakeholders?
Formalize Your Agreement
Any serious partnership should include formally documented commitments from both parties. This helps establish alignment on goals and expectations, and also serves as an important reference for accountability.
At a minimum, we recommend documenting the following:
- Financial Expectations
- Time and Prioritization:
Manufacturers: How is your product prioritized vs. others in the distributor’s portfolio?
Distributors: How important is your market to this manufacturer? What is their willingness to support you?
- Communication and Collaboration: Structured agreement for project planning and scheduled business reviews.
An Ounce of Prevention…
When it comes to partner selection, the old adage rings true: it’s better to focus on prevention than be forced to find a cure. If you put in the extra work to fully evaluate your potential partners, ensure alignment in key areas, and formalize commitments, your partnerships will be significantly more likely to yield beneficial results.
myCaribou Makes Partner Selection Easy
All the tools you need to find, evaluate, and succeed with partners are available in myCaribou’s Channel Optimization Platform. myCaribou gives manufacturers and distributors access to in-depth partner matching tools with shortlists, collaborative workspaces for real-time communication, and a growing network of over 40,000 manufacturers and distributors in 125+ countries.